Bulgaria's GDP Grows by 6.4% in Q2 of 2021 - Finance Ministry

NW 11:30:31 12-10-2021

Bulgaria's GDP Grows
by 6.4% in Q2 of
2021 - Finance Ministry

Sofia, October 12 (BTA) - In the second quarter of 2021, Bulgaria's GDP grew by 6.4 per cent year-on-year with a positive contribution from domestic demand, reads the Finance Ministry's Monthly Report on Bulgarian Economy. It assesses the short-term dynamic of main economic indicators, with the published data covering the period up to September 17, 2021.

Consumption and investments

Household consumption went up by 9.4 per cent, backed by a significant improvement in consumer trust and an increase in real household disposable income, which is the result of higher compensations for the employed and pension spending.

Investments grew by 11.6 per cent year-on-year, mostly thanks to the change in reserves. These accounted for 1.6 per cent of the GDP growth, and investments in base capital went up by 3.5 per cent. The export of goods contributed the most to the increase in total export, which was by 22.2 per cent greater than in the first half of 2020. The growth in export of services was driven by the restart of tourist trips. The high domestic demand led to a strong rise in the import of goods and services, the Finance Ministry said.

Employment and labour productivity

In the second quarter of 2021, those employed in Bulgaria's economy numbered 3,513,600, remaining at the level registered in the same period of 2020. An year-on-year change was observed, however, by type of employment: the number of hired individuals grew by 56,300 (2.2 per cent), while that of the self-employed dropped by 54,400 (5.6 per cent), mostly due to fewer people working in agriculture (minus 64,000 people or minus 12 per cent).

Real growth in labour productivity sped up to 6.4 per cent year-on-year. An increase in productivity was registered in almost all economic activities.

Credits and interest rates

Loans for the private sector went up in July 2021 and reached an annual growth rate of 7.2 per cent, compared to 6.4 per cent at end-June 2021. This speedy rise was the result of an increase in loans both to non-financial enterprises and to households.

The growth rate of business loans increased to 4.6 per cent in July 2021 from 3.2 per cent in June thanks to the faster increase in mid-term and long-term loans. Household loans went up by 10.8 per cent in end-July, compared to 10.4 per cent a month earlier, mainly as a result of household loans being promoted through low interest rates and rising housing prices. The growth rate of consumer loans reached 9.3 per cent in July 2021, compared to 9 per cent in June 2021.

The weighted average interest rate on loans for house purchase remained unchanged in July 2021, staying at the all-time low of 2.75 per cent observed in June 2021. At the same time, the weighted average interest rate on consumer loans and loans to non-financial enterprises went up. The weighted average return on deposits of non-financial enterprises and households became positive once again (0.001 per cent), while the weighted average return on households' deposits decreased to an all-time low of 0.05 per cent.

Tax revenue

In January-July 2021, the Consolidated Fiscal Programme (CFP) reported a surplus of 0.6 per cent of projected GDP. CFP receipts increased by 15.8 per cent year-on-year, mostly thanks to tax revenues, which grew by 13.5 per cent as a result of the economic recovery in the second quarter of 2021 and the measures taken to improve tax collectability, the Finance Ministry said.